Avoiding the cost of your conscience: belief dependent preferences and information acquisition

Claire Rimbaud and Alice Soldà ()
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Alice Soldà: Ghent University

Experimental Economics, 2024, vol. 27, issue 3, No 1, 547 pages

Abstract: Abstract Pro-social individuals typically face a trade-off between their monetary incentives and their other-regarding preferences. When this is the case, they may be tempted to exploit the uncertainty in their decision environment to reconcile this trade-off. In this paper, we investigate whether individuals with belief-dependent preferences acquire information about others’ expectations in a self-serving way. We present a model of endogenous information acquisition and test our theoretical predictions in an online experiment based on a modified trust-game in which the trustee is uncertain about the trustor’s expectations. Our experimental design enables us to (1) identify participants with belief-based preferences and (2) investigate their information acquisition strategy. Consistent with our predictions for subjective belief-dependent preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.

Keywords: Belief-dependent preferences; Information acquisition; Self-serving biases; Experiment (search for similar items in EconPapers)
JEL-codes: C91 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Avoiding the cost of your conscience: belief dependent preferences and information acquisition (2024)
Working Paper: Avoiding the Cost of your Conscience: Belief Dependent Preferences and Information Acquisition (2021)
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DOI: 10.1007/s10683-024-09827-z

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